October 23, 2008

 

Thursday: China soybean futures settle sharply down as other markets fall

 

 

Soybean futures traded on the Dalian Commodity Exchange settled sharply lower Thursday, tracking an overnight tumble in crude oil futures and external markets.

 

The benchmark May 2009 soybean contract settled RMB133 lower at RMB3,127/tonne, down 4.1%.

 

The contract opened sharply lower and soon touched its 5% lower limit.

 

But it recouped much of the losses toward the closing bell, as market sentiment was helped by a rebound in futures traded on the Zhengzhou Commodity Exchange.

 

Sugar futures on the ZCE led the rebound, touching the 4% upper limit, as the market expects the government to issue more policies to boost sugar prices, which weren't included in earlier supporting policies for agricultural products, said Gao Yanrong, an analyst at Dalu Futures.

 

Meanwhile, analysts said as China sugar futures don't track overseas markets much, the impact on sugar futures from the global financial woes is comparatively smaller compared with other commodities.

 

The battle between long position holders and short position holders is heating up, and any rebound could be extensive, as soybean and soy products on the Chicago Board of Trade are oversold, said Gao.

 

Open interest in all soybean contracts fell 7,222 lots to 635,380 lots Thursday.

 

Trading volume fell to 1,291,472 lots from 1,819,224 lots Wednesday.

 

Corn futures, soymeal futures, soyoil futures and palm oil futures all settled lower.

 

Soyoil and palm oil futures remained limit-down for most of the session but were off their lows toward the closing bell.

 

Soyoil processing plants are suffering bigger losses as domestic demand remains bearish, while the government is buying soybeans at prices higher than cash market prices to protect farmers' interests, said traders.

 

As a result, domestic soybean cash prices were lower Thursday.

 

Thursday's settlement prices in yuan a metric tonne for benchmark contracts and the volume for all contracts in lots (One lot is equivalent to 10 tonnes):

   

Contract       Settlement       Price         Change       Volume

Soybean        May 2009       3,127        Dn  133    1,291,472

Corn              May 2009       1,643        Dn   12       574,978

Soymeal        Jan 2009        2,598        Dn   98     1,056,874

Palm Oil         Jan 2009        4,560        Dn  178        17,972

Soyoil            Jan 2009        6,076        Dn  220        93,956